The Market Monitor Minding the Nation's Business
House Deputy Majority Leader Janette Garin of Iloilo was piqued at the recent hearing of the Murang Pagkain supercommittee with the failure of the Department of Agriculture to explain how it arrived at the P58 per kg. as the maximum suggested retail price.
Garin called that rate as “unrealistic” and a “disservice” to consumers saying the DA failed to address the key issues in the rice supply chain that have driven up prices.
With this, the supercommittee panel chair, Albay Rep. Joey Sarte Salceda will summon Agriculture Secretary Francisco Tiu Laurel to the next hearing.
Why does DA have an MSRP of P58? Which planet does it come from, Mr. Chair?” Garin said during her interpellation. MSRP should have been lower after the price of regular milled rice dropped, she said.
The DA started imposing the MSRP of P58/kg last January 20 to have a balance between business sustainability and the welfare of consumers and farmers.
Salceda questioned DA Undersecretary Asis Perez, who attended the hearing, on the basis of the P58 as MSRP. “My God, that’s too high,” considering that the cost of imported rice has gone down to between P44 and P47, while the buying price for palay (unmilled rice) has fallen, as well, Salceda noted.
Perez justified P58 MSRP as part of a pilot program in Metro Manila, where rice prices reportedly hovered between P62 and P64 per kilo.
He explained that the figure considered the landed cost of imported rice plus distribution chain markups.
Perez said the P58 price “is based on the landed cost of imported rice, plus a reasonable markup for all those involved in the distribution chain; that chain is long.”
Garin rejected this position saying rice prices in Mindanao ranged from P37 to P45 per kilo, with premium varieties capped at P50.
Garin said that in an inspection and consultation with the wholesalers in Bulacan, “it was announced in the media by no other than Laurel, together with the DA family, that they will bring down the price of rice to P45 to P49.” But no such thing happened, Garin said.
“How can we control the price of rice when the agency that is supposed to guide us is pegging it at a high price?” Garin asked.
Garin cited reports showing that the landed cost of imported rice ranged from P35 to P39 per kilo, significantly lower than the DA’s MSRP.
Even with logistics and markups, she argued, rice should not exceed P45 to P49 per kilo at retail.
Garin criticized DA’s method for setting the MSRP, arguing that it was based on inflated market prices rather than actual production costs and reasonable margins.
She also accused the DA of neglecting its responsibility to monitor and regulate the supply chain, alleging that collusion among traders and monopolistic practices among retailers were inflating prices.
She reiterated her call for the National Bureau of Investigation (NBI) to investigate the matter.
The supercommittee, formed by House Resolution 254 of Speaker Ferdinand Martin G. Romualdez, brings together five key committees to identify gaps in government programs and hold accountable those responsible for market abuses.
The joint panel is composed of the Committees on Ways and Means, Trade and Industry, Agriculture and Food, Social Services, and the Special Committee on Food Security.